Sports Authority Scores Profits

The Sports Authority Inc., the nation's largest sporting goods retailer, reported a 22 percent jump in second-quarter profits and raised its profit forecast for the full year.

But Sports Authority also noted that its store sales softened in late July as hot weather and a soft economy cut into apparel sales. Fort Lauderdale-based Sports Authority traditionally has a weaker first and third quarter, but company executives are projecting a wider loss for the 2002 third quarter than analysts had expected.

Sports Authority also said on Wednesday that it has withdrawn a planned $90 million stock offering, due to adverse market conditions.

The company had intended to use the proceeds to reduce long-term debt and for capital improvement projects. Chairman and Chief Executive Marty Hanaka said the company's cash flow is sufficient without the offering to fund its growth plans, which include remodeling 10 stores and opening three new stores the second half of this year.

Its shares fell 18 percent Wednesday to close at $7.10, down more than 50 percent from April 17 when the stock traded at a 52-week high of $14.85.

On Tuesday, after the close of stock trading, the company announced that its chief operating officer and head of store operations, James Tener, resigned to pursue other interests. Hanaka said Wednesday, "Jim was going to get a reduced role and he concluded it was better for him to move on."

For the quarter ended Aug. 3, sales rose 1.3 percent to $375.8 million. Sales at stores open at least a year were flat. Net income rose 22 percent to $9.3 million, or 27 cents per diluted share.

Hanaka said he projected a loss of 15 to 17 cents in the third quarter, compared with a loss of 14 cents in the third quarter 2001. That compares to the 9-cent average loss forecast by analysts polled by market research firm Thomson First Call.

Barbara Powell can be reached at bpowell@sun-sentinel.com or 954-356-4668.